Editor’s note: This is the first in a two-part series on marijuana businesses in Covington, Maple Valley and Black Diamond.

Moments after making the gutsiest accusation of her life, Vali Bauer’s mind drifted to the old TV sitcom “Ellen”. Specifically, the episode where Ellen leapt out of the closet by announcing her sexuality over an airport intercom microphone.

In both cases, the speaker appeared to shock herself almost as much as the crowd of people around her.

But when Bauer outed herself, and her partner Angie Rand, during a Black Diamond City Council public hearing on March 6, and in the process accused the city of homophobia, it wasn’t an act of pride as much as a plea to understand.

The city recently revoked the business license for Lady Buds, Bauer and Rand’s “health and wellness center” located in the heart of the city, claiming the shop misrepresented its application and role with marijuana. The owners have not only appealed the decision, but are also asking why the city renewed the license once, only to change its mind more than a year later.

Bauer began to wonder if it was her short haircut.

“Never in a million years did I think I would out myself in front of a City Council,” she told The Reporter. “But I felt it had to be done.”

DISCRETE BUSINESS

Tucked between the Food Mart and a liquor store on Black Diamond’s main drag is a bright pink storefront. Frosted windows shield a view into the lobby.

Other than a trace whiff of the customary skunky smell, which is largely concealed by a blasting air conditioner, and a small paper cutout on the bulletin board that says, “Marijuana: It’s not just for hippies anymore,” one might think the waiting room was a dull dentist’s office. There’s a steel door that leads to the rest of the building that not even reporters are allowed through.

“Rules are rules,” Rand says.

Bauer was diagnosed with multiple sclerosis in 2000 and despite a “snow storm” of lesions on her brain, exhibits no visible signs of the disease. Bauer takes one injection per week and uses medicinal marijuana at nights after work. Although the injections make her feel sick, the combination keeps her feeling healthy.

“Something is working for me,” she said. “I’m not going to mess with a good thing.”

She spent 25 years in the aviation industry, but grew tired of job insecurity and opened Lady Buds in August of 2012. At the time, Black Diamond had no marijuana moratoriums in place.

This is where the conflicting stories begin.

In April 2012, Bauer and Rand submitted a business application to open a “collective garden business engaged in counseling services, care-giving services, outpatient healthcare services and distribution of herbal remedies.”

The city responded with a letter stating that collective gardens and dispensing medical marijuana is not lawful business activity for the city since it violates federal law.

The pair reapplied one month later with the business now described as “holistic therapies and retail sales,” with a hand written addition of “massage, teas and herbs.” After speaking with Lady Buds’ attorney and the prospective landlord, the city approved.

Although marijuana is not specifically mentioned on either application, Bauer said she was under the impression that it was a “don’t ask, don’t tell” kind of situation.

“We used collective garden because we weren’t trying to hide anything,” she said. “We relied on our attorney. We knew they didn’t have a moratorium. We did literally what they asked us to do.”

Lady Buds runs a “management company,” where no marijuana is ever actually grown or sold, but it is often stored. The company has up to 10 patients in their membership group at any give time. Bauer says the company facilitates an exchange between sick patients and individual growers. The patients can then “contribute” the suggested donation level for the grower and Lady Buds.

In other words, Lady Buds connects patients with growers in a safe environment.

“We want to be totally forthcoming with who we are and what we do,” Bauer said.

The city approved the business license in the fall of 2012 and renewed it for 2013. There were no known complaints about Lady Buds, but in September the city asked the organization to surrender its business license by Oct. 14 of 2013. In February, the city sent a letter revoking their license and denying their application for 2014, claiming that Lady Bud’s “misrepresented” what it would be doing on its business application.

The couple and their attorney Jay Berneburg appealed the denial, saying no unlawful drug activity has occurred on the premises and that they did not get their license by fraud or false representation. They claim that the city was always aware that marijuana was on site. Former and current city staff and council members disagree.

“We always suspected, but we didn’t ever go in and look for it or anything,” said former mayor Rebecca Olness. “We were told by other people.”

Current Councilwoman Carol Benson said the city didn’t know Lady Buds actually dealt with marijuana until patients came forward to back the business during a public hearing.

“We didn’t know they were doing that until September of last year,” Benson said. “They weren’t honest with their business license.”

Items for exchange listed on the Lady Buds website include “flowers” with names like Alien Dog and Lemon Kush. There is also hash and marijuana-infused sodas, hard candies, cookies, chocolate Bonbons and olive oil.

Former city administrators Mark Hoppen and Pete Butkis told The Reporter that marijuana was never an approved part of Lady Buds’ business.

Butkis, who was interim city administrator from July-December 2012, said Berneburg maintained on two phone conversations that Lady Buds did not sell or store marijuana on the premises.

Berneburg sent the city a letter explaining how Lady Buds fully complied with the Washington Medical Marijuana Act, dated Oct. 29, 2012, and invited the city officials to inspect the premises.

“There is no misrepresentation here at all,” he said. “Maybe they forgot about that or are conveniently overlooking it.”

Lady Bud’s landlord, Sinh Dau, said his tenants have always been straightforward about their business. He said the council gave their original approval with that knowledge.

“Now they changed their minds,” Dau said. “If they move out it will be very hard to find a tenant this good.”

Philip Dawdy, media and policy director at the Washington Cannabis Association, said the city should have known what “herbal remedy” implied, especially since Lady Buds originally included collective gardens in the description.

“The words herbal and remedy are still in there; they should know what that means,” Dawdy said. “How could the city not have known?”

The city claims to have admissible evidence that Lady Buds has “possessed and sold marijuana” on three occasions — late December 2012, mid-July 2013 and mid-January 2014.

Bauer said the undercover officers “probably did” receive marijuana on site so long as they signed up as members and had a prescription and proper documentation.

“Oh absolutely, I’m sure they did get in,” she said. “They probably came in posing as patients or got authorization.”

Berneburg said the city has been ordered to turn over information about the alleged stings and he will have a chance to cross examine the officers in front of a hearing examiner.

“It is absolutely bizarre,” he said. “We want to see the reports and flush out the details… There was no sale whatsoever. The whole thing is a flat out fabrication, an absolute lie. These people need to be called out.”

Berneburg also decried the city’s decision to send undercover police officers in to pose as terminal patients.

“It is despicable,” he said. “It is morally bankrupt. I don’t know how these people sleep at night.”

Carol Morris, who was hired as the new city attorney on March 6, and City Administrator Christy Todd declined comment on case specifics since the case is being appealed. Mayor Dave Gordon did not return a phone call seeking comment.

DISCRIMINATION CLAIMS

Both Bauer and Rand say they’ve never directly been discriminated against in the city, but the allegations of homophobia by former Black Diamond Police Officer Scott Oak in 2013 caused them to wonder. Bauer said she thinks there is “a very good chance” that homophobia played a role in the city’s decision against Lady Buds, which is why she made the following comment at the March 6 meeting in reference to the business license denial: “…Some people know that Angie and I are more than just business partners. I just hope that mine and Angie’s sexuality is not the reason.”

Bauer stands by her decision to come out of the closet and make a public inference of homophobia at the same time.

“Did my haircut give it away,” Bauer said, laughing, during an interview with The Reporter. “It seems like there’s got to be some behind-the-scenes stuff going on.”

Former and current city staff who spoke with The Reporter not only denied such allegations, but also said they were unaware of Bauer and Rand’s sexual preferences.

“I can certainly tell you that isn’t true because it’s the first I’ve heard of it,” Olness said.

Benson said she’d met the pair once and didn’t care about their sexual orientation.

“I think she just used that as a ruse,” she said. “I don’t know anybody in council that’s ever discussed that. They just don’t have a license to dispense. Nothing else has anything to do with it. It’s just a legal issue.”

Todd said she’d never met the business owners before the March 6 meeting.

“I don’t know why they believe that to be true,” she said. “I was surprised.”

Hoppen also said he was surprised when told over the phone of the homophobia allegation.

“I had no idea (of their sexual orientation),” he said. “That’s news to me. I can’t imagine why anyone would even look to that.”

Berneburg said there appears to be a compelling argument of potential homophobia within the city’s administration, he just doesn’t know how far it reaches.

“We don’t have any smoking gun memos,” he said. “But where there is smoke there’s fire and there’s certainly smoke here.”